Over the past decade, all residents of this country have seen dramatic rises and declines in the stock markets, housing values, and several other key items that affect the average consumer’s personal finances. This has made it very difficult to predict what the future economy will look like, which makes it next to impossible to properly prepare for the future. Another item that can be difficult to predict and prepare for is a family’s future healthcare costs. The costs of healthcare have gone up dramatically over the past few decades, and changes in legislation make them even more unpredictable. While healthcare costs will be difficult to predict, there are things that the typical family can do to ensure that they can properly prepare for and finance their future healthcare costs.
Use an Estimator
The first tip for preparing financially for future medical costs would be to use an estimator to determine what their costs will be in the future. There are a variety of online tools available that can estimate future insurance costs, based on a variety of factors. When using one of these estimators you will be able to input a lot of information about your family, their specific medical needs, and some other information. From there, the website will be able to estimate what your future insurance premiums will be, what the average person in your position will spend on procedures, doctor visit co-pays, and prescriptions, and what may or may not be covered under insurance through the current healthcare legislation
Know the Taxes
The second tip for reducing your future healthcare costs would be to try and make as much of them tax free as possible. Many employers provide their employees with the option of buying into a flex spending account for their medical costs. Contributions to these plans are typically made with each paycheck and are on a pre-tax basis. Whenever you go to the doctor, get a prescription, or have a medical procedure done, you can then use these funds to pay. By doing this, you can effectively save up to 40% off of the costs. While using flex-spending accounts can be a great option, consumers need to be aware that they could end up losing the money entirely if they do not use the money within three months after the calendar year ends.
Another tip to help to save for future medical costs would be to try and reduce medical costs through healthy lifestyle practices. People that follow a healthy diet and exercise regularly tend to live longer and more fulfilling lives and experience expensive medical conditions less frequently. This can lead to fewer trips to the doctor and less prescriptions that need to be filled. The correlation between exercise and eating a healthy diet and reduced medical costs is so strong that many insurance companies are starting to offer reduced rates for people that go to the gym frequently and have lower blood pressure and cholesterol levels.
After using the medical cost estimator, using the pre-tax flex spending accounts, and looking for ways to be healthier and avoid medical costs, the next thing that you need to do is to start saving money designated for healthcare costs. Beyond paying for insurance, you will need to put a certain amount of money each month into an account that is reserved solely to pay for emergency healthcare costs. It would be a good idea to place the money into an account that gains some interest, but is relatively risk averse and can be easily liquidated. Having this excess cash available will allow you to avoid having to pay interest on debts owed to either the hospital or credit card companies.
Author Bio: Sarah Daren is a writer who creates informative articles relating to the field of health. In this article, she offers a few tips for dealing with family health costs and aims to encourage further study with an home health denver.